We Ran A Stock Scan For Earnings Growth And Orient Ceratech (NSE:ORIENTCER) Passed With Ease

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Orient Ceratech (NSE:ORIENTCER). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

Check out our latest analysis for Orient Ceratech

How Quickly Is Orient Ceratech Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That means EPS growth is considered a real positive by most successful long-term investors. We can see that in the last three years Orient Ceratech grew its EPS by 10% per year. That growth rate is fairly good, assuming the company can keep it up.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Orient Ceratech shareholders can take confidence from the fact that EBIT margins are up from 2.4% to 7.4%, and revenue is growing. Both of which are great metrics to check off for potential growth.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

Since Orient Ceratech is no giant, with a market capitalisation of ₹7.5b, you should definitely check its cash and debt before getting too excited about its prospects.

Are Orient Ceratech Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

We haven't seen any insiders selling Orient Ceratech shares, in the last year. With that in mind, it's heartening that Ketan Shrimankar, the Non-Executive Independent Director of the company, paid ₹563k for shares at around ₹38.84 each. It seems that at least one insider is prepared to show the market there is potential within Orient Ceratech.

Should You Add Orient Ceratech To Your Watchlist?

As previously touched on, Orient Ceratech is a growing business, which is encouraging. While some companies are struggling to grow EPS, Orient Ceratech seems free from that morose affliction. The icing on the cake is that an insider bought shares during the year; a point of interest for people who will want to keep a watchful eye on this stock. Even so, be aware that Orient Ceratech is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Orient Ceratech, you'll probably love this curated collection of companies in IN that have witnessed growth alongside insider buying in the last three months.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.